Javier, the Regional Sales Director, covered the Tennessee territory for 12 years. Mind you, that was some eight years ago, as he was recently reminded. Wow! Has it really been 20 years since I started in the communications systems business? A lot has changed in 20 years!

Javier is now hiring for that same position he once held. Again. For some reason, he’s having difficulty keeping the position filled, and no one is quite sure why.

The thing is, Javier knows this position. He ran it, and he was good at it. The territory was always fruitful back when he was selling. He’d always exceeded quota, but when he thinks about it, his hires never seem to be able to match his expectations.

A decade ago (or two now!), communications systems were a bit different. Everything is far more virtual than wired. More hosted than hardware. The sales are different and more complex as they often include third parties to help with additional applications and implementation. Furthermore, the industry in Javier’s former territory has shifted. The growth centers are now in different cities, and in many of the cities in Javier’s old territory, there has been economic decline. While many of the same clients and contacts still exist, they aren’t spending on the same things they once did. Not a lot of innovation is happening in the area.

Still, Javier has done his research, and the data is there that businesses still need the communication solutions his company provides. Sure, their product may be a tad premium for the territory, but a good salesperson ought to be able to overcome that. Javier did, after all.

As Javier sits down with the Operations & Enablement team to discuss the latest turnover stats, he can’t help but feel attacked. The other members of the committee are suggesting that maybe his quota allocation is a bit out of reach for the territory. Javier is looking at all the data they’re giving him, but there must be something missing. There must be some information out there that proves he’s right and that it’s just a string of bad sellers that are causing this problem. “There must be more data to support my position,” he thinks.

I’m going to stop the story right there because the point of it isn’t to show a happy ending, but rather to demonstrate two types of bias that may be preventing Javier from performing optimally as a sales leader as he could.

Confirmation Bias

Javier doesn’t want to admit this, but his perspective and information are a little outdated. Communications have changed in the years since he was selling. Instead of accepting that fact, Javier is latching on to the piece of data that confirms his belief. He sees that businesses in the territory need communications systems. It’s that simple! Or is it?

Of course, this is only a small piece of the puzzle, but it’s the piece he’s clinging to. This is called confirmation bias.

In my book Starting Simple: Finding Fairness, I describe confirmation bias in the following way:

This occurs when we seek out information that supports our stance. Data has a story to tell, but it’s all too easy to allow our bias to shape the story. For example, say you’re leading the air purifier company that cleaned house during the pandemic. The bar graph of your sales over the past ten years shows a drastic spike sometime around 2020, with sustained growth over a couple of years. But now, it’s starting to dip.

You like those big numbers. You want to have even bigger numbers. You’re looking to scale the company to a new level based on those numbers. And that’s confirmation bias at work. You can point to information that justifies growing your sales division and setting a stretch goal. You can talk yourself into believing that the slight dip in revenue this past year is a fluke or a result of your sales team getting too relaxed.

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In this case, Javier doesn’t want to be wrong. He doesn’t want the failings to be his. So, he’s grasping for data that supports his preferred reality rather than allowing the data to tell the story alone.

Information Bias

Another thing Javier is doing to further support his position is seeking information that isn’t there. Forget the fact that his commercial support team is showing him data that proves he has a quota allocation problem, and he doesn’t want to see it. So, he is choosing to believe that there are answers outside of the situation that can help.

From Starting Simple: Finding Fairness:

More isn’t always better, but with information bias, the idea is that more information will help you make a better decision. Notice we didn’t say that more relevant information will help you make a better decision.

With this bias, you seek information even if that information isn’t relevant to the decision at hand. This might occur when you’re in a particularly indecisive place or if you have a clear decision at hand but just don’t like it. Your response may be to seek more data and more information for no other reason than the unconscious belief that the answer lies outside of where you are now. Be wary of living in this analysis paralysis world for too long.

When setting a target, there’s a time for planning and research, and there’s a time for action. If your team is telling you there’s nothing left to be learned, it’s time to make a decision whether you like that decision or not.

Javier needs to listen to his support team. Sometimes, we have to simply check our egos and follow the guidance of those around us.

Why Worry About Bias in Sales?

I can think of dozens of reasons why these lessons are crucial to anyone in sales leadership, but what I want to focus on is job satisfaction and retention.

Your sales compensation plan has the primary purpose of keeping your salespeople both satisfied and hungry at the same time. It’s the unique walk of attracting external talent, motivating current actions and behaviors, and ultimately retaining top performers. You want the sales team to hit realistic targets but feel excited to go for more. And you want them to stay for the long run.

Making sure your comp plan is fair takes a lot of work, but one of the most impactful things you can do is assess it for biases like the ones illustrated in Javier’s story. Javier’s example is related to both defining the total market value and assessing what is achievable. This is the overlap between both territorial assignment and target setting.

If you have a sales compensation conundrum of your own, I’m here to help. With over sixteen years in sales compensation, I’ve pretty much seen it all.

You can reach me here.

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